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Malayan Law Journal Reports/1969/Volume 2/IN RE LEN CHEE OMNIBUS CO LTD CHIN SOW LAN v LEE
CHEE OMNIBUS CO LTD & ORS - [1969] 2 MLJ 202 - 6 June 1969
2 pages
[1969] 2 MLJ 202

IN RE LEN CHEE OMNIBUS CO LTD CHIN SOW LAN v LEE CHEE OMNIBUS CO LTD
& ORS
OCJ KUALA LUMPUR
RAJA AZLAN SHAH J
ORIGINATING SUMMONS NO 42 OF 1968
6 June 1969
Companies -- Application for rectification of register -- Discretion of court -- Delay in bringing application -Laches -- Companies Act, 1965, s 162
In this case the applicant applied for an order under section 162 of the Companies Act, 1965 that the
register of members be rectified. The applicant claimed to be the registered owner of the disputed shares in
the respondent company. In September 1957 she went to see a director of the company and informed him
that she intended to give a power of attorney to her mother in relation to her shares. Subsequently the
mother obtained a share transfer form and gave that to the director for the applicant to sign. The director then
requested the applicant to sign the transfer form saying that it was to effect a power of attorney. It was only
after the death of her mother in 1963 that the applicant discovered that her shares had been transferred to
and registered in her mother's name. It was not till December 1968 that this application was made.
Held:

1)
1)

the court has a discretion to give a summary remedy under section 162 of the Companies
Act, 1965, but would not normally entertain such an application if the facts are as in this case,
complex and disputed;
in this case the application was not made within a reasonable time after the applicant became
aware of the facts entitling her to relief and the application must therefore be dismissed for
laches.

Cases referred to
Re Stranton Iron and Steel Co (1873) LR 16 Eq 559
Re Russian Iron Works Co (1866) 1 Ch App 574
Re Ruby Consolidated Mining Co (1874) 9 Ch App 664
Re Greater British Products Development Corporation (1924) 40 TLR 488
Smith v Clay (1767) 3 Bro CC 639n at 640n
ORIGINATING SUMMONS

Kirpal Singh Brar for the applicant.

AA Thomas for the 1st respondent.

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KL Devasar for the 2nd, 3rd and 4th respondents.

RAJA AZLAN SHAH J
This is an application by way of summons made under section 162 of the Companies Act, 1965 for an
order that the register of members be rectified by deleting the name of Low Hon as holder of 20 shares in the
respondent company and inserting therein the name of the appellant. The said company is the first
respondent, the last three respondents are administrators of the estate of Low Hon, who was the applicant's
mother.
The applicant in her affidavit stated that in 1953 she was the registered owner of the disputed shares in the
respondent company. Some time in September 1957 she went to one Wong Ah Chiew who was a director of
the respondent company and informed him that as she was leaving the country to settle down in Singapore,
she intended to give her mother, Low Hon, a limited power of attorney, that is, to collect the monthly
allowances and the dividends arising from her shares. The applicant's mother later obtained a share transfer
form and gave that to Wong Ah Chiew for the applicant to sign. Wong Ah Chiew then requested the applicant
to sign the transfer form saying that it was to effect a power of attorney to enable her mother to collect the
monthly allowance and dividends. The applicant signed the transfer form thinking that it was merely to give a
power of attorney to her mother. The mother was not present. It was only after the death of her mother in
August 1963 that she discovered that her shares had been transferred to and registered in the mother's
name.
Wong Ah Chiew in his affidavit deposed that the applicant saw him and informed him that she intended to
leave Ampang to settle down in Singapore and that she intended to make provision for her mother. She
intended to give her a power of attorney to enable her to collect the monthly allowances and the dividends
from the shares. Later, the applicant's
1969 2 MLJ 202 at 203
mother came to him with a transfer form and requested him to get it signed by the applicant. Accordingly, he
proceeded with the transfer form to the applicant and informed her that it was to effect a power of attorney.
The applicant then signed the form. Subsequently, a circular resolution was issued to the directors of the
registered company for approval. The resolution was signed by the other directors upon Wong Ah Chiew
informing them that it was only for the purpose of approving a power of attorney in respect of the applicant's
shares made in favour of her mother. Liew Pah Ngen, the managing director and Tai Hin, a director of the
respondent company gave similar accounts in their respective affidavits. But neither of them had seen the
transfer form. Liew Fah Ngen deposed that the shares transfer was not attached to the circular resolution. Tai
Hin further deposed that he did not know whether the shares were transferred to the mother's name or only
to her as an attorney.
The last three respondents disputed the power of attorney. They claimed that it was an outright transfer to
the mother.
Mr. Devasar on behalf of the last three respondents submitted that the dispute could not be dealt with under
section 162 of the Companies Act in that in so far as the applicant alleged that she had been cheated or
defrauded or misled which called for further investigation, the only way open to her was to bring a regular
suit.
Section 162 of the Companies Act, 1965 provides as follows:"Sub-section (1). If - (a) the name of any person is without sufficient cause entered in or omitted from the register ... the
person aggrieved may apply to the court for rectification of the register, and the court may refuse the application or may
order rectification of the register and payment by the company of any damages sustained by any party to the
application."

That section provides for a summary remedy. Its exercise is a matter of discretion which should not be
unduly fettered. The decided cases, merely furnish valuable illustrations of the exercise of the discretion.
Whether a case falls to be adjudged under section 162 or by a regular action must in the end depend upon

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the particular facts. However, one thing is clear. Where the facts are admitted and the question is simply one
of law as in the case of Re Stranton Iron and Steel Co (1873) LR 16 Eq 559, where the applicants, the owner
of shares, transferred them to nominees and the question of law was whether the respondent company was
justified in refusing registration or where the facts can easily be ascertained such as where an applicant who
has applied for shares in a company on the faith of the prospectus stating its objects sought to remove his
name from the register on discovering that the prospectus was at variance with the memorandum of
association, (see Re Russian Iron Works Co Stewart's Case (1886) 1 Ch App 574) the court will entertain the
application under the summary procedure, but where the facts are complex and in dispute (see Re Ruby
Consolidated Mining Co, Askew's Case (1924) 40 TLR 488) such as where an applicant was induced to take
shares by fraud and that facts alleged by him are denied by the company, or where it is clear that some
question in dispute calls for investigation as in Re Greater Britain Products Development Corporation (1874)
9 Ch App 664, the court will refuse to entertain the application and will leave the applicant to seek
rectification in a regular action.
In the present case there are in my view further facts to be ascertained such as: why did the mother go to
see Wong Ah Chiew with a transfer form? Why did Wong Ah Chiew who was a director of the respondent
company ask the applicant to sign the transfer form but intending it to be a power of attorney? Other matters
requiring consideration are the examination of the transfer form in question and the circumstances in which
the circular resolution was passed. I feel more facts leading to the ascertainment of the truth can be elicited
in a witness action than it would be upon evidence on affidavits, for it involves very serious charges of fraud
against a director of the respondent company.
There is another point which is against the applicant. The court, having concurrent equitable jurisdiction, is
not bound to follow what a court of law would do in such a case in adjudicating under section 162 of the
Companies Act but will take cognisance of well-known equitable principles. In the words of Lord Camden
L.C. in Smith v Clay (1767) 3 Bro CC 639n at 640n a court of equity "has always refused its aid to stale
demands, where a party has slept upon his right and acquiesced for a great length of time. Nothing can call
forth this court into activity, but conscience, good faith, and reasonable diligence; where these are wanting,
the court is passive, and does nothing."
The applicant said that she became aware that her shares had been registered in her mother's name
subsequent to her mother's death. That was in 1963. Letters of administration of her estate were granted to
the last three respondents in July 1966. The present summons were taken out in December 1968. That was
not done within a reasonable time after she became aware of the facts entitling her to relief. I am of the
opinion that she is guilty of laches.
1969 2 MLJ 202 at 204
I would therefore dismiss the application with costs with liberty to file a regular action within one month of this
order.
Application dismissed.
Solicitors: Kirpal Singh Brar; Ranjit, Thomas & Kula; Devaser & Co